Constellation to sell gas plant to LS Power, raises operating earnings forecast
Constellation to sell gas plant to LS Power, raises operating earnings forecast Aug 6 (Reuters) - Power company Constellation Energy CEG.O said on Thursday it will sell a gas plant in Texas to LS Power for $860 million, and also raised its current-year operating earnings forecast on the back of robust power demand.
Shares of the company were up 5% in premarket trading.
The sale of Brazos Valley Energy Center plant to LS Power marks the last divestiture required by Constellation to complete its $16.4-billion acquisition of Calpine assets.
Constellation has been expanding beyond its nuclear-heavy fleet, with its Calpine acquisition adding a large gas-fired generation portfolio that gives it more flexibility in high-demand markets such as Texas.
"We're strengthening the nation's energy infrastructure and helping meet growing demand for reliable power," said CEO Joe Dominguez.
In a separate statement, LS Power said its deal for the Texas plant, expected to close by the end of this year, will bring its total capacity to 14,100 MW post completion and strengthen its presence in ERCOT, one of the fastest-growing power markets.
LIFTS FORECAST ON ROBUST POWER DEMAND
Constellation, the largest nuclear power operator in the U.S., has been benefiting from robust power consumption in the country.
The company said on Thursday it has signed agreements to provide an additional 920 megawatts (MW) of nuclear power to a diverse set of investment-grade customers for 15 to 20 years, with supply set to begin from 2029 through 2032.
It has also filed applications with the Nuclear Regulatory Commission to extend the operating licenses of its Ginna Clean Energy Center and Nine Mile Point Unit 1 reactor in New York to 2049, a 20-year extension if approved.
The Baltimore, Maryland-based company posted operating earnings of $2.55 per share, beating the average of analysts' estimates of $2.28 per share, according to data compiled by LSEG.
The company raised its forecast for operating earnings to a range of $11.50 to $12.50 per share, from $11.00 to $12.00 per share earlier.
(Reporting by Dharna Bafna in Bengaluru; Editing by Leroy Leo)